Back in the early and mid Naughties (aside from the dodgy haircuts) the love affair with property in the North was at it’s peak everybody and their granny had an eye on the property market and on the look out for a good investment. The only trouble was that what people where looking to do was to cash in on the spiralling prices of an over inflated market and make a quick few pound by selling or “flipping” the property and keeping the difference. But this could not last and when the bubble burst it went with bang and a lot of people where left with properties that they could not afford the mortgage repayments for. Dark days followed and the love affair with property was over for many.
Most people have had a dodgy relationship in one form or another throughout their time but as the Gallagher brothers say “don’t look back in anger”. As we all know (especially in N.I.!) it’s important that we learn from our past and so when investing in property we must look at the investment in the long term as there’s no such thing as a quick buck in this game. So what the investor will focus on is the rental yield of a property to ascertain how good a return on the investment is. OK so in English the rental yield of a property is the annual rental income of a property divided by the cost of the investment multiplied by 100.
An example if the above is an investor buys a house in Belfast for £65,000.00. He rents the property for £500 per month (£6000 per year). Therefore the rental yield is 6000/ 65000 = 0.0092 x 100 = 9.2%.
In my humble opinion anything with an 8% and over rental yield is an excellent buy and as a wise man once told me will certainly “wash it’s own face”. The morale of this tale is not to let past experiences put you off there is still plenty of good money in bricks and mortar. With Valentines Day on the horizon let me re ignite the flames of passion with property and drop me an email on email@example.com with any property related questions you may have and I’ll do my best to keep the love alive!!